Competing Against Luck: The Story of Innovation and Customer Choice

by Clayton M. Christensen

The magic of the Jobs to Be Done lens is that there isn’t any magic required at all. The lens allows you to look at the same things everyone else is looking at—but enables you to see differently.

Chapter Takeaways Jobs Theory provides a clear guide for successful innovation because it enables a full, comprehensive insight into all the information you need to create solutions that perfectly nail the job. There are many ways to develop a deep understanding of the job, including traditional market research techniques. While it’s helpful to develop a “job hunting” strategy, what matters most is not the specific techniques you use, but the questions you ask in applying them and how you piece the resulting information together. A valuable source of jobs insights is your own life. Our lives are very articulate and our own experiences offer fertile ground for uncovering Jobs to Be Done. Some of the most successful innovations in history have derived from the experiences and introspection of individuals. While most companies spend the bulk of their market research efforts trying to better understand their current customers, important insights about jobs can often be gathered by studying people who are not buying your products—or anyone else’s—a group we call nonconsumers. If you observe people employing a workaround or “compensating behavior” to get a job done, pay close attention. It’s usually a clue that you have stumbled on to a high-potential innovation opportunity, because the job is so important and they are so frustrated that they are literally inventing their own solution. Closely studying how customers use your products often yields important insights into the jobs...

Chapter 5 How to Hear What Your Customers Don’t Say The Big Idea Most companies want to stay closely connected to their customers to make sure they’re creating the products and services those customers want. Rarely, though, can customers articulate their requirements accurately or completely—their motivations are more complex and their pathways to purchase more elaborate than they can describe. But you can get to the bottom of it. What they hire—and equally important, what they fire—tells a story. That story is about the functional, emotional, and social dimensions of their desire for progress—and what prevents them from getting there. The challenge is in becoming part sleuth and part documentary filmmaker—piecing together clues and observations—to reveal the jobs customers are trying to get done.

founding what would become the American Girl doll company back in 1985.

The forces compelling change to a new solution: First of all, the push of the situation—the frustration or problem that a customer is trying to solve—has to be substantial enough to cause her to want to take action. A problem that is simply nagging or annoying might not be enough to trigger someone to do something differently. Secondly, the pull of an enticing new product or service to solve that problem has to be pretty strong, too. The new solution to her Job to Be Done has to help customers make progress that will make their lives better. This is where companies tend to focus their efforts, asking about features and benefits, and they think, reasonably, that this is the roadmap for innovation. How do we make our product incredibly attractive to hire?

The forces opposing change: There are two unseen, yet incredibly powerful, forces at play at the same time that many companies ignore completely: the forces holding a customer back. First, “habits of the present” weigh heavily on consumers. “I’m used to doing it this way.” Or living with the problem. “I don’t love it, but I’m at least comfortable with how I deal with it now.” And potentially even more powerful than the habits of the present is, second, the “anxiety of choosing something new.” “What if it’s not better?”

Consumers are often stuck in the habits of the present—the thought of switching to a new solution is almost too overwhelming. Sticking with the devil they know, even if imperfect, is bearable. I refused to upgrade my mobile phone for years, in spite of all the whiz-bang things my assistant assured me the new phone could do, because I was comfortable with the one I had. This is largely because—as Nobel Prize winner Daniel Kahneman has shown—the principal pull of the old is that it requires no deliberation and has some intuitive plausibility as a solution already. Loss aversio...

The progress customers are trying to make has to be understood in context. I can’t think of a clearly defined job in which the emotional and social forces—and the forces compelling and opposing change—are not critically important. Customers are always reluctant to fire something until they are sure they have something better, even if they’re firing simply living with an imperfect solution.

One company that has taken this to heart is Mercer, which my coauthor David Duncan worked with as it sought to create new businesses to drive growth.

Building Customer Stories So how can you begin to map out these competing forces to get to the crux of your customers’ jobs? Your customers may not be able to tell you what they want, but they can tell you about their struggles. What are they really trying to accomplish and why isn’t what they’re doing now working? What is causing their desire for something new? One simple way to think about these questions is through storyboarding. Talk to consumers as if you’re capturing their struggle in order to storyboard it later. Pixar has this down to a science: as you piece together your customers’ struggle, you can literally sketch out their story: Once upon a time . . . Every day . . . One day . . . Because of that, we did this . . . Because of this, we did that . . . Finally I did . . . You’re building their story, because through that you can begin to understand how the competing forces and context of the job play out for them.

The moments of struggle, nagging tradeoffs, imperfect experiences, and frustrations in peoples’ lives—those are the what you’re looking for. You’re looking for recurring episodes in which consumers seek progress but are thwarted by the limitations of available solutions. You’re looking for surprises, unexpected behaviors, compensating habits, and unusual product uses. The how—and this is a place where many marketers trip up—are ground-level, granular, extended narratives with a sample size of one. Remember, the insights that lead to successful new products look more like a story than a statistic. They’re rich and complex. Ultimately, you want to cluster together stories to see if there are similar patterns, rather than break down individual interviews into categories.

One of the fundamental mistakes that many marketers make is to collect a handful of data points from a huge sample of respondents when what they really need—and this interview illustrates—is a huge number of data points from a smaller sample size. Great innovation insights have more to do with depth than breadth.

The key to getting hired is to understand the narrative of the customer’s life in such rich detail that you are able to design a solution that far exceeds anything the customer themselves could have found words to request. In hindsight, breakthrough insights might seem obvious, but they rarely are. In fact, they’re fundamentally contrarian: you see something that others have missed.

You are selling progress, not products.

Chapter Takeaways Deeply understanding a customer’s real Job to Be Done can be challenging in practice. Customers are often unable to articulate what they want; even when they do describe what they want, their actions often tell a completely different story. Seemingly objective data about customer behavior is often misleading, as it focuses exclusively on the Big Hire (when the customer actually buys a product) and neglects the Little Hire (when the customer actually uses it). The Big Hire might suggest that a product has solved a customer’s job, but only a consistent series of Little Hires can confirm it. Before a customer hires any new product, you have to understand what he’ll need to fire in order to hire yours. Companies don’t think about this enough. Something always needs to get fired. Hearing what a customer can’t say requires careful observation of and interactions with customers, all carried out while maintaining a “beginner’s mind.” This mindset helps you to avoid ingoing assumptions that could prematurely filter out critical information. Developing a full understanding of the job can be done by assembling a kind of storyboard that describes in rich detail the customer’s circumstances, moments of struggle, imperfect experiences, and corresponding frustrations. As part of your storyboard, it’s critically important to understand the forces that compel change to a new solution, including the “push” of the unsatisfied job itself and the “pull” of the new solution. I...

Chapter 6 Building Your Résumé The Big Idea Uncovering a job in all its rich complexity is only the beginning. You’re a long way from getting hired. But truly understanding a Job to Be Done provides a sort of decoder to that complexity—a language that enables clear specifications for solving Jobs to Be Done. New products succeed not because of the features and functionality they offer but because of the experiences they enable.

By one estimate, the typical American Girl Doll purchaser will spend more than six hundred dollars in total. To date, the company has sold 29 million dolls and racks up more than $500 million in sales annually.

When you see a company that has a product or service that no one has successfully copied, like American Girl, rarely is it the product itself that is the source of the long-term competitive advantage,

The experiences you create to respond to the job spec are critical to creating a solution that customers not only want to hire, but want to hire over and over again.

Consider IKEA, for example. IKEA is one of the most profitable companies in the world and has been so for decades. Its owner, Ingvar Kamprad, is one of the wealthiest men in the world. How did he make so much money selling nondescript furniture that you have to assemble yourself? He identified a Job to Be Done.

The reason why we are willing to pay premium prices for a product that nails the job is because the full cost of a product that fails to do the job—wasted time, frustration, spending money on poor solutions, and so on—is significant to us. The “struggle” is costly—you’re already spending time and energy to find a solution and so, even when a premium price comes along, your internal calculus makes that look small compared with what you’ve already been spending, not only financially, but also in personal resources.

Medical-device manufacturer Medtronic learned this the hard way when it was trying to introduce a new pacemaker in India.

The Uber Experience

Why are Amazon’s reviews so powerful? Because they help customers make the progress they want to make. If I look around my house or my friends’ houses, for example, I can see a wide variety of products that were purchased on Amazon. A TV. A rice steamer. A digital camera. A smoothie maker. What enables me and millions of others to buy unfamiliar items with greater confidence by virtue of a listing on a website? The requisite list of features and functionality doesn’t help me much—in fact my eye tends to skip right over that section. But it does go immediately to the line that tells me where I can figure out if this is the right product to hire for my job: “56 reviews. 21 answered questions.” Sure, seeing an item with a bunch of four-out-of-five-star ratings helps, but what I really need to know is what do reviewers who were hiring for the same job as me have to say? There might be lots of toaster oven reviews about whether it browns the toast evenly (there are, apparently, a lot of people who care about that stuff!), but I really want to know whether it will help me heat a frozen pizza when I don’t want to crank up our conventional oven. I’m sure many people care about the pixels and zoom on a digital camera, but I just want to know that it is easy to set up and use. In other words, Amazon allows me to shop unfamiliar categories with total confidence because I can find folks who share my job and gauge the performance that matters most to me from those reviews.

Online reviews have fundamentally improved the experience of purchasing almost anything in recent years. We can check reviews on everything from auto repair shops to insurance companies with a few clicks on our keyboard. Online reviews help great products get hired. But they are a two-sided coin. From the business’s perspective, they represent the first time in history where you have to think about how to convey who should not hire your product.

Research has suggested that as many as 95 percent of consumers use reviews and 86 percent say they are essential when making purchase decisions.1 And nearly one-third of consumers under the age of forty-five consult reviews for every single purchase. Businesses now have to consider how to educate customers about what job these products and services are designed to do2—and when potential customers should not consider hiring them. That is a new wrinkle.

FedEx is now a household name, but breaking into the market might have seemed impossible decades ago. But through a job lens, it makes sense. When competitors successfully enter markets that seem closed and commoditized, they do it by aligning with an important job that none of the established players has prioritized. Pixar gave theatergoers a reason to care about the studio producing a film. The Apple brand assures people that the technology will be easy to use and elegantly designed. American Girl enables mothers and daughters to connect and create shared experiences in ways that defy industry categorization.

Milwaukee Electric Tool Corporation has cornered the market in two areas with its strong purpose brands: Sawzall and HOLE HAWG.

Chapter Takeaways After you’ve fully understood a customer’s job, the next step is to develop a solution that perfectly solves it. And because a job has a richness and complexity to it, your solution must, too. The specific details of the job, and the corresponding details of your solution, are critically important to ensure a successful innovation. You can capture the relevant details of the job in a job spec, which includes the functional, emotional, and social dimensions that define the desired progress; the tradeoffs the customer is willing to make; the full set of competing solutions that must be beaten; and the obstacles and anxieties that must be overcome. The job spec becomes the blueprint that translates all the richness and complexity of the job into an actionable guide for innovation. Complete solutions to jobs must include not only your core product or service, but also carefully designed experiences of purchase and use that overcome any obstacles a customer might face in hiring your solution and firing another. This means that ultimately all successful solutions to jobs can be thought of as services, even for product companies. If you can successfully nail the job, over time you can transform your company’s brand into a purpose brand, one that customers automatically associate with the successful resolution of their most important jobs. A purpose brand provides a clear guide to the outside world as to what your company represents and a clear guide to your empl...

Chapter 7 Integrating Around a Job The Big Idea Organizations typically structure themselves around function or business unit or geography—but successful growth companies optimize around the job. Competitive advantage is conferred through an organization’s unique processes: the ways it integrates across functions to perform the customer’s job.

Unlike the situation at a traditional hospital, the Mayo Clinic puts somebody in charge of the process. So, for example, when someone like me comes for a diagnostic visit, that person thinks about all the medical specialties that are involved, which are most likely to have the best insight, and in what order I’d be likely to need to see them. That process person will set up the appointments—sometimes in real time—for me to see all the right specialists while I’m there in that one visit. Every specialist is required to keep openings in the day to accommodate real-time needs.

Processes are invisible from a customer’s standpoint—but the results of those processes are not. Processes can profoundly affect whether a customer chooses your product or service in the long run. And they may be a company’s best bet to ensure that the customer’s job, and not efficiency or productivity, remains the focal point for innovation in the long run. Absence of a process, as is the case with most traditional hospitals, is actually still a process. Things are getting done, however chaotically. But that’s not a good sign. W. Edwards Deming, father of the quality movement, may have put it best: “If you can’t describe what you are doing as a process, then you don’t know what you are doing.”

Keeping what matters in focus is challenging for any organization, especially with the forces at play as a company grows. “Now that we’re a much larger company, it’s been a challenge to keep the various parts of the company focused on the customer benefit,” says Intuit founder Scott Cook. “It’s so tempting for parts of the organization to start looking at other things. In our kind of business, you get all this data about ‘conversions’ and ‘retention,’ and so on. We got seduced by that.” It is, to be sure, easier to focus on efficiency rather than effectiveness. Most businesses are very, very good at that. Creating the right metrics is hard. But so important.

The Taylorist designs of our standard business processes and computer programs is to compute efficiency. To get to effectiveness, you have to break the mold of things you have embedded in your assumptions and in software.

Having the right measurements in place helps institutionalize a process. It’s how your employees know they’re doing the right thing, making the right choices. As the old saying goes, “What gets measured, gets done.” From its inception, Amazon has laser-focused on three things that solve customers’ jobs—vast selection, low prices, and fast delivery—and designed processes to deliver them. Those processes include measuring and monitoring how it’s achieving those three ultimate goals on a minute-by-minute basis. The end goal is getting the customers’ jobs done—everything works backward from there. “We always start with the customers and look at all the metrics that matter for the customer,” explains Amazon’s senior vice president for international retail Diego Piacentini.

New innovations at Amazon famously start with a mock “press release” that is presented to the team that will consider and work on that innovation. The press release contains the guiding principles for that innovation—all experiences and processes are derived from the clarity of what job customers will hire this product or service to do, as outlined in the press release at the innovation kickoff meeting. In that room are not just marketing people, but engineers, analysts, and so on—everyone whose work will play a role in fulfilling that Job to Be Done. “It all starts with that press release,” Piacentini says. “No matter who owns the pieces of the product, you’re part of that process.”

time. The important thing is to be attached to the job, but not the way we solve it today. Processes must flex over time when a better understanding of customer jobs calls for a revised orientation. Otherwise you’ll risk changing the concept of the job to fit the process, rather than the other way around.

Hiring OnStar for Peace of Mind

Ford’s core mistake—of focusing on the product spec rather than the job spec—gets repeated all the time. In fact, the misstep is so common in the high-tech world, that Anshu Sharma of Storm Ventures has earned justifiable recognition for calling attention to the problem, which he has dubbed “stack fallacy.” Stack fallacy highlights the tendency of engineers to overweight the value of their own technology and underweight the downstream applications of that technology to solve customer problems and enable desired progress. “Stack fallacy is the mistaken belief that it is trivial to build the layers above yours,” Sharma says. It’s the reason that companies fail so often when they try to move up the stack. “They don’t have first-hand empathy for what customers of the product one level above theirs in the stack actually want. They’re disconnected from the context in which their product will actually be used.” Stack fallacy applies outside of the technology sphere, too. For instance, it might be easy for you to have a vegetable garden. You know what herbs and vegetables you like—and all you have to do is to learn how to grow them and use them in your own cooking. On the other hand, your understanding of growing and using herbs does not prepare you to open and run a restaurant. In fact, eight out of ten restaurants fail within five years. Knowledge of production, Sharma says, is not the same thing as knowing what customers are looking for.

In short, stack fallacy and Jobs Theory shine light on the same hazard: to mistake technical know-how—which Ford and Qualcomm had in spades—for the customer’s Job to Be Done, about which they understood very little. The high-stakes consequence is to dismiss the specific customer application as trivial when it is, in fact, essential. By contrast, Huber and his team maintained clear focus on the Job to Be Done. They invented, reinvented, and reinforced an entire set of processes to ensure that they were delivering peace of mind to customers. By 2009 OnStar, by itself, had become a key reason that people bought certain GM cars.

The gravitational pull of existing process is very, very strong. But forewarned is forearmed. In the next chapter we will focus on how to ensure that your processes align with the Job to Be Done and deliver results for both your customers and your shareholders.

Chapter Takeaways As we’ve said in the last chapter, the key to successful innovation is to create and deliver the set of experiences corresponding to your customer’s job spec. To do this consistently, a company needs to develop and integrate the right set of processes that deliver these experiences. Doing so can yield a powerful source of competitive advantage that is very difficult for others to copy. Despite the value of developing a set of processes integrated around the customer’s job, it does not come naturally to most companies. Processes abound in all companies, of course, but in most cases they are aimed at improving efficiency or achieving a narrow outcome within a specific function. Delivering a complete set of experiences to nail the job usually requires that new processes be deliberately defined, and new mechanisms put in place to coordinate functions that are usually siloed. A powerful lever to drive job-centric process development and integration is to measure and manage to new metrics aligned with nailing the customer’s job. Managers should ask what elements of the experience are the most critical to the customer, and define metrics that track performance against them. Most organizations do not have one person who is the “steward” ensuring the company consistently delivers against the customer’s job. Traditional organizational structures and siloes do have value and are likely to endure, and large-scale reorgs are not usually practical. Therefore, the best ...

Chapter 8 Keeping Your Eye on the Job The Big Idea The day a product becomes real and hits the market, everything changes for managers. There’s so much pressure to grow that it’s possible to lose sight of why customers hired you in the first place. Even great companies can veer off course in nailing the job for their customers—and focus on nailing a job for themselves. In our research and experience, that happens because companies fall into believing three fallacies about the data they generate about their products: The Fallacy of Active Versus Passive Data, The Fallacy of Surface Growth, and The Fallacy of Conforming Data.

When seen through a Jobs lens, V8 need not compete against Diet Coke and cappuccino. It can compete against vegetables! And just as the milk shake wins the game of commuting hands down against bananas and bagels, V8 wins hands down against peeling carrots, boiling spinach, and flossing celery strings out of your teeth.

By contrast, many successful start-ups do start out selling quarter-inch holes. The original kernel of the idea for Netflix was uncovered the way many start-ups gain traction: an entrepreneur found himself in a circumstance with no clear solution and declared, “I’m going to fix this!” In a sense, he began both as the CEO and a target customer—there was no separation between the innovator and his customer’s job. Much of the information needed to make decisions about solving for a job is found in the context of the struggle. We call that “passive data” because it has no voice or clear structure or champion or agenda. Passive data, by itself, doesn’t tell us what is going on in the world because the Job to Be Done doesn’t change much. Passive data is just unfiltered context. It’s always present, but it isn’t loud.

Or in medicine, consider how doctors often treat symptoms, rather than getting to the cause of the problem. High blood pressure, for example, is a symptom of several different diseases. But most drugs for people who struggle with high blood pressure focus on getting those numbers down, rather than curing what’s causing them in the first place.

Companies do this, too. They manage the numbers. Think about the correlation between earnings per share and the price of your shares in the market. If a company goes into the market and repurchases some of its own shares, it can improve the earnings per share and the stock price often goes up. But it’s done absolutely nothing to make the company more innovative or more efficient. The number went up. Period.

2. The Fallacy of Surface Growth When a company makes big investments in developing relationships with customers, natural incentives arise to find ways to sell more products to existing customers. The marginal cost of selling more products to existing customers is very...

3. The Fallacy of Conforming Data The Fallacy of Conforming Data is the third fallacy that causes companies to lose their focus on the customers’ Job to Be Done. Data has an annoying way of conforming itself to support whatever point of view we want it to support. In fact, Nate Silver, a well-known statistician and founder of the New York Times political blog FiveThirtyEight (it was acquired by ESPN in 2013), noted, “The most calamitous failures of prediction usually have a lot in common. We focus on those signals that tell a story about the world as we would like it to be, not how it really is.”8 We don’t realize this, we don’t mean for it to happen, but it is an unfortunate frailty of the human brain. Psychologists have explained that when we hold conflicting ideas or beliefs in our minds, this “dissonance” produces reactions of stress and anxiety that we naturally seek to minimize and avoid. Uncomfortable truths are just that—uncomfortable. As data comes in, it’s not that we lose objectivity—we never had it to begin with. I can’t help but think of every parent-teacher conference I ever attended—my wife and I would always leave the room with totally different perspectives on what we just heard. I heard, I’m sure, the things that confirmed my expectations. My wife, I suspect, heard something closer to what the teacher actually said. We make the data and the messages conform to what we believe.

All the teams are working with a kind of confirmation bias—seeing only the information that tends to support their point of view. None of these perspectives is wrong, but the point is that none is truly objective. And more important, not one of the models reflects the customers’ job.

“Decisions don’t get made. They happen,” observes neuromarketing expert, Gerald Zaltman, a longtime colleague at Harvard Business School who has spent years studying how managers represent their ideas and apply their ideas and knowledge.